A federal court has approved a $9.5 million wage and hour class action settlement involving a California health care provider. The approval settles a two-year-old case in which over 6,500 employees of John Muir Health claimed several violations of the state’s wage and hour laws. The defendant admits to no wrongdoing as is typical in settlements of this nature, but agreed to the resolution in order to avoid what could have been years of expensive and contentious litigation.
The cause of action for this class action lawsuit dates to the fall of 2013. At that time, lead plaintiff Karen M., a case manager for John Muir for 19 years, says the company began requiring its employees to carry out certain job-related tasks after business hours, and after the employees had already clocked out. According to the complaint, employees were routinely ordered to continue entering patient data and processing insurance claims. This reportedly was done to cut costs after the layoffs of several workers increased the employees’ workload.
The lead plaintiff also claimed that the defendant ordered employees to work through state-mandated meal and rest breaks, violating a number of California labor regulations.
A Twist – and the Defendant’s Response
According to an amended complaint filed in December 2017, the case took a bizarre twist when John Muir allegedly approached potential plaintiffs with larger claims and offered them $1,000 apiece not to join the lawsuit. Then, in March 2018, John Muir Health filed a motion to dismiss the case altogether, citing a Rule of Procedure that required the plaintiff to supply the court with a “more definite statement.”
Eventually, the plaintiff filed an amended complaint that listed nine specific provisions of the California Labor Code as well as the federal Fair Labor Standards Act (FLSA) that were allegedly violated. These included failure to:
- Pay overtime wages in accordance with the FSLA
- Pay minimum and overtime wage for all hours worked
- Provide meal and rest breaks
- Provide accurate wage statements
- Pay all wages on time
In addition, the court ruled that John Muir Health failed to disclose the amounts involved when it engaged in “negotiating individual settlements” (it should be noted that in offering employees $1,000 apiece to waive their legal claims, the defendant did nothing illegal; their oversight was not making the court privy to the proposed terms).
The case was allowed to go forward and eventually granted class status in April 2018, to include all “non-exempt” employees who had worked a minimum of one shift and had made at least one entry into the defendant’s database while off the clock or on a break.
About California Wage and Hour Law
California’s wage and hour regulations are very specific for employee compensation. Employers are required to pay a minimum of time-and-a-half for every hour on the clock beyond 8 in one day or exceeding 40 in a week. Duty-free rest and meal breaks are also mandatory.
In addition to civil liability and restitution, employers found in violation of California’s labor codes can wind up paying fines to the state. These vary, depending on the nature and length of the violation, but as one example, an employer can be fined $250 for each pay period the state-mandated minimum wage was not paid.
The recently settled California Wage and Hour class action lawsuit is Martinez, et. al, vs. John Muir Health, et. al., Case No. 4:17-cv-05779-CW, U.S. District Court, Northern District of California.
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